SOME DRAWN BY TAXES, INCENTIVES

Commercial real estate space rates in Austin versus San Diego are a wash at about $25 per square foot. However, Dallas, Houston, El Paso and San Antonio are significantly cheaper, Co-star Property reports.

And just because Texas doesn’t charge corporate income tax, businesses operating there still pay taxes. Texas imposes a margins tax based on gross receipts. That means most businesses pay 1 percent of gross receipts minus the partial cost of goods sold. For retailers, the rate is 0.5 percent. It generates about $3.9 billion for the state annually, Ernst & Young reports.

But Loeffel said it’s still cheaper than what he paid in California.

“We don’t pay anywhere near the taxes we paid before,” he said, also noting the lighter regulatory environment.

Ernst & Young also reports that in fiscal year 2011 Texas took in $56.8 billion in state and local business taxes — including $25 billion in property taxes — for a total effective tax of 5.1 percent on gross state product. California came out to 5.3 percent of gross state product — $29.8 billion in property tax and $9.6 billion in corporate income tax. However, Adibi reiterated that Texas is generating its tax revenue from oil production. It’s not a reflection on corporations being taxed heavily, he said.

“If the gas and oil production suddenly stops,” Adibi said, “the total collection of percent of output is going to be very small.”

Calculating the overall tax burden for businesses is difficult because state rates fluctuate and different businesses can qualify for different tax breaks.

Last year, the Tax Foundation collaborated with KPMG on comparing effective tax rates on certain industries state-by-state. When comparing Texas and California, Texas was cheaper for eight of 14 categories of several industries depending on whether they were newly opened or established.

Texas was best for manufacturing operations, corporate headquarters, older call centers and older retail. California was better for distribution centers, research and development, newer call centers and newer retail.

Getting what you pay for?

Perry’s most recent visits here are fueled by the November passage of California Proposition 30, which raised sales and some income taxes.

(The sales tax in San Diego is now 8 percent. In Texas, it can be up to 8.25 percent — that’s the rate in Austin).

Still, California provides a higher level of service than other states, said Kish Rajan, director of California Gov. Jerry Brown’s Office of Business and Economic Development, Go-Biz.

Rajan defended the state’s tax rates, saying they fund key services and are a known quantity to businesses who can budget for them. But, he said, there is work to be done on overlapping and confusing regulations.

“I think that a lot of things that these states are selling are lower costs, lower costs, lower costs, and our mantra in California is we’re not in a race to the bottom with any other state,” he said. “We have found a way in our state to have very high quality, very high value. We’ve proven that you can have a successful economy and still preserve the environment and look after workers and protect consumers and look after the public health.”